India is the 3rd most sought-after global manufacturing hub, targeting $1 trillion in exports by 2030 through FDI and PLI schemes.
India is emerging as a global manufacturing powerhouse, supported by a 69% increase in FDI over the past decade. Government initiatives like the Production-Linked Incentive (PLI) schemes have attracted investment worth Rs. 1.76 lakh crore, positioning the nation to capture a major share of global consumption.
Includes engineering, manufacturing, construction equipment, and industrial infrastructure essential for power, transportation, and urban development.
What drives earnings
Value chain
What Matters Now
• Energy supply restrictions for industrial users due to West Asia crisis
• Rising freight costs impacting manufacturing export margins
• Continued strength in domestic retail demand for automobiles
Next 12M
• Execution of the Drone Promotion and Utilisation Policy 2025
• Recovery of global shipping routes in the Middle East
Tailwinds
Robust FDI Inflows
FDI in manufacturing reached $165.1 billion, a 69% increase over the decade, providing necessary capital for capacity expansion.
FDI reached Rs. 14,45,781 crore ($165.1 billion) with a 69% increase over the past 10 years. (IBEF Manufacturing)
PLI Scheme Momentum
Incentives across 12 sectors have attracted investments of Rs. 1.76 lakh crore, driving large-scale manufacturing capacity.
PLI schemes disbursed Rs. 21,534 crore in incentives, attracting Rs. 1.76 lakh crore in investments. (IBEF Manufacturing)
Urban Vertical Growth
The rise in high-rise buildings and vertical urban development is specifically driving the elevator and escalator market segments.
India’s elevators and escalators market is driven by urban vertical growth. (IBEF Home)
Headwinds
West Asia Supply Chain Disruptions
The crisis in West Asia has disrupted imported gas supplies and flagged potential shipment delays for industrial goods.
Adani Total Gas curbs supply for industries due to West Asia crisis; Jindal Stainless flags shipment delays. (Economic Times)
Rising Freight Costs
Increased shipping costs and geopolitical instability threaten the competitiveness of manufacturing exports.
Pharma and industrial exports face hits as freight costs rise amid Middle East war. (Economic Times)
High Global Yields
Rising global yields and regional wars are stalling overseas fundraising plans for industrial corporations.
West Asia war and rising global yields stall India Inc’s overseas fundraising plans. (Economic Times)
Cycle
mid upcycleThe sector is in a structural growth phase driven by government policy and FDI, though currently facing temporary geopolitical supply chain and energy hurdles.
Improves next
• Stabilization of industrial gas supplies
• Increased disbursement of EV and technology subsidies
Breaks setup
• Prolonged conflict in West Asia impacting energy security
• Significant slowdown in global consumption affecting the $1T export target
Growth Catalysts
Export Market Expansion
Targeting $1 trillion in exports by 2030 requires massive scaling of industrial and capital goods capacity.
India has the potential to export goods worth US$ 1 trillion by 2030. (IBEF Manufacturing)
New Technology Policies
Policies like the Drone Promotion Policy 2025 offer high capital subsidies (up to 40%) for new tech manufacturing.
Drone Policy 2025 offers a 40% capital investment subsidy up to Rs. 30 crore for new investments. (IBEF Manufacturing)
Policy Watch
Production-Linked Incentive (PLI) Schemes
Who benefits: Large-scale manufacturers in auto, electronics, and engineering
Who is at risk: Unorganized players lacking scale to meet incentive thresholds
PLI schemes attracted investments of Rs. 1.76 lakh crore as of March 2025. (IBEF Manufacturing)
EV Charging Point Subsidies
Who benefits: Capital goods companies in electrical equipment and EV infrastructure
Who is at risk: Fossil-fuel dependent industrial suppliers
Govt aims to disburse Rs 80 crore subsidy for EV charging points by end of FY26. (LiveMint Industry)
Internal Coverage Snapshot
growth 7.5, sentiment 9.3, 6 active strategies
| Company | Sub-sector | Latest qtr score | Growth score | 4Q Avg Score | Avg scoreDerived from first 3 |
|---|---|---|---|---|---|
TDPOWERSYS | Electrical Equipment | 9.3 | 8.4 | 9.0 | Blend 8.9 |
SCHNEIDER | Electrical Equipment | 9.1 | 8.1 | 8.2 | Blend 8.5 |
INTERARCH | Pre-engineered Building (PEB) Manufacturing | 8.0 | 7.5 | 8.4 | Blend 8.0 |